Equity Release and social care benefits

George115

My in-laws are considering an equity release scheme and both are in receipt of direct payments to help to pay for daily personal care. We contacted the local authority to ask if their allowances will be affected if they go ahead with equity release and were told that they would not be able to answer this question until the equity release was done. Has anyone been in a similar situation? Does anyone know of a website / official body we can go to for advice? We have been on the Equity Release website and are unable to find any information regarding this issue on there.
Thanks, George.

Silvertabby

According to the Citizen's Advice website, PIP isn't means tested - but are your in-laws getting PIP or something else? If they have a CAB office nearby, perhaps they could take any paperwork in and ask the CAB benefits experts for help.

Westminster

Direct Payments are means-tested and I suspect it will have an impact on their payments from the council.

There is a threshold savings level though - how much are they looking to release?

AnotherJoe

The equity release is a red herring, all that matters is the money your ILs would have access to; Theres no ore reason for the equity release scheme to have info about means test as the price of Lamborginis or world cruises, its up to the recipients as to what they do with their money.

The ER scheme providers would also be a hostage to fortune if they made any statements about whether people would be eligible or not for benefits.

All you need to enquire about is, what is the threshold of savings at which these payments will be reduced. I'd have thought that any sort of equity release woudl be likely to exceed that since its not going to be a couple of grand is it? And the council surely could tell you that? You dont need to confuse them with where the money comes from, they shoudl be able to tell you the threshholds.

From here

Care at Home means test

You can be charged for home care services if you have more than the amounts shown in the table below.
The value of your home is not taken into account when working how much you have to pay.
How your assets and savings affect how much you pay for care

Region Local authority or trust helps pay for care costs if you have assets and savings of _ England less than £23,250 Scotland less than £25,250 Wales*_ less than £23,750 Northern Ireland less than £23,250

It might be better if (if you have the money) to DIY your own equity release scheme, you loan them money, secured by a charge against the house (see a solicitor), and each tranche of money is below the threshhhold for benefits. That way, should they need to go into care and the house is sold, your money is protected and the IL's dont lose out in the meantime.

George115

The property has been valued at £850K and they owe the bank £250K.
Thanks for your reply.

George115

Thanks to all for the helpful advice - and to you Joe for the links. Unfortunately, no family member has funds to help with the shortfall, so your excellent idea isn't an option.